Manitoba to receive more equalization money, but the increase is smaller than in 2024

Posted on December 24, 2024 by Peggy

The Manitoba government is set to receive $337 million more in equalization payments from the federal government in the next fiscal year.

The total of more than $4.6 billion is a 7.7 per cent increase over this year’s level and follows a 24 per cent jump from last year.

Equalization is a federally-funded program that gives money to poorer provinces so that they can offer similar services to richer provinces at comparable tax rates.

The program is based on a complex calculation of each province’s ability to raise its own revenues, and Manitoba is the only western province that receives equalization.

Manitoba Finance Minister Adrien Sala has promised to cut the provincial deficit and balance the budget by 2027.

He says he will look at the federal funding as he prepares for the coming year.

“We will analyze the federal communication as we build next year’s budget,” Sala said in a written statement.

Equalization payments from Ottawa account for more than 15 per cent of the Manitoba government’s revenues, and annual funding amounts have swung up and down in past years.

Manitoba saw its equalization funding drop sharply 15 years ago under former premier Greg Selinger, who later raised the provincial sales tax.

Equalization payments to Manitoba started to rise markedly in recent years and jumped by more than $840 million in the current fiscal year, which ends in March. The allotment for 2025-26 is more than double what Manitoba received in 2019-20.

This report by The Canadian Press was first published Dec. 24, 2024

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